“This decision showcases how industrial development can co-exist with environmental stewardship and Indigenous interests.” – Andy Calitz, CEO of LNG Canada.
Finally. Rapidly growing demand in Asia, particularly China, persuaded LNG Canada partners to announce a positive final investment decision Monday on the $40 billion liquefaction project that will be built in Kitimat to process natural gas piped from NE British Columbia. But perhaps even more important than economic benefits is the way companies engaged local First Nations, building partner relationships rather than simply “consulting.”
The economic benefits are considerable. The decision is for two processing units or “trains,” with first LNG (liquefied natural gas) expected by 2025.
According to the company, the LNG plant and Coastal GasLink pipeline project (approved Monday by TransCanada) will employ 10,000 workers at peak construction and as many as 900 during first phase operations.
And if one LNG plant is built, expect a domino effect.
“If you get one plant through,” CNRL’s executive vice-chairman Steve Laut said last week at the Global Business Forum in Banff, “there will be a second and third plant that will follow much easier, and that makes a difference.”
A key feature of the project, one that proponents were quick to stress in their statements, is the role that indigenous communities will play in LNG Canada.
“The final investment decision taken by our joint venture participants shows that British Columbia
and Canada, working with First Nations and local communities, can deliver competitive energy
projects,” said Calitz.
“This is huge news,” said Karen Ogen-Toews, CEO of First Nations LNG Alliance, a group of indigenous communities that will be affected by the project, and former chief of the Wet’suwet’en Nation, in a press release.
“It means jobs and training and education and it means opportunities for First Nations businesses and procurement and partnerships. Imagine what these can do for First Nations communities where unemployment now can be running at 50 and 60 and 70 per cent. And in the longer term it means lifetime careers, and steady, reliable, sources of revenue for First Nations and communities.”
Crystal Smith, chief councillor for the Haisla Nation whose territory will be the site for the new plant, praised LNG Canada for setting “the bar very high in terms of interaction” with indigenous people .
“Their approach is community-based. They have worked on our needs and the environmental impact with our environmental team,” she said in a release.
“The environment is absolutely important to us, and LNG Canada has set a standard for how to address our concerns, and for how responsible development can be done.”
Ogen-Toews says that Trans Canada Corporation and its Coastal GasLink Pipeline adopted a similar approach with First Nations.
“That is one reason why the elected councils of all 20 First Nations along the pipeline route have reached agreements with Coastal GasLink. And those agreements also mean training, education, jobs, business opportunities, and careers,” she said.
Coastal Gaslink announced in June that it had conditionally awarded $620 million of contracts to indigenous-owned businesses in northern BC to supply right-of-way clearing, medical, security and camp management needs and expected another $400 million in additional contract and employment opportunities during pipeline construction.
“The relationships we have built with our local and Indigenous communities play a vital role in the work that we do every day,” said George Hemeon, senior manager, indigenous and local contracting and employment for Coastal GasLink.
The company says that it worked with First Nations to design long-term benefit programs that include “direct project involvement through specialized liaison committees and tailored contracting and employment plans that meet the specific needs of indigenous communities.”
The BC government also entered into agreements that provide payments and other benefits, such as a mechanism to resolve disputes.
The LNG Canada (partners are Royal Dutch Shell, Malaysia’s Petronas, PetroChina Co Ltd, Korea Gas Corp, and Japan’s Mitsubishi Corp) and TransCanada seem to have accomplished something enjoyed by no other energy project in recent memory: peace in the valley.
Contrast this with the political and constitutional crisis besetting the Trans Mountain Expansion pipeline project, whose approval was recently quashed by the Federal Court of Appeal in part because Ottawa failed to adequately consult with First Nations.
And let’s not forget the pipeline industry’s utter dismay over Bill C69, the new legislation that will determine how the environmental impacts of future major natural resource projects will be assessed. One of the concerns is inclusion of traditional knowledge and the requirement for indigenous input during the planning stage.
Somehow, a massive new development with a combined LNG plant and pipeline budget of $48 billion has avoided becoming a political and public relations nightmare.
One might think there are lessons to be learned by industry, governments, and regulators. Can we imagine a future where all energy infrastructure projects go this smoothly?